Posts Tagged repossession
An Opportunity to Renovate Property and Make Money
Posted by admin in renovation on August 2nd, 2010
Property prices are falling and are still expected to fall further. If the property needs renovating then selling it in the current times will be even harder simply because there are fewer buyers and fewer mortgages. Sellers are worried about the extent of how much they still have to fall and therefore are very keen to sell and accept a very low offer. However, with the US government’s bail out plan ($700 billion if agreed) and new support from the Central Bank and Bank of England the financial markets are expected to stabilise. In turn confidence will return and banks will gradually increase their lending to each other. When this filters through to the high street, mortgages should begin to be more readily available and there will be more buyers and property prices will start to rise. Buying before this happens is your opportunity.
Firstly you need to know how to find a property to renovate. At the current time more homeowners are defaulting on their mortgages and as a result repossessions are on the increase. The unfortunate homeowner wants to get back as much money as they can and generally sell or take everything they can from the property – sometimes whole kitchens and bathroom suites are removed before the bank takes back the property. More properties are being sold at auction yet there are fewer buyers and as a result the property is sold very cheaply. To find auction houses see the auction directory at www.wheresmyproperty.com. Remember to gather as much information as you can prior to the auction and do your homework on the auctioning process.
Another way to buy property is to use a company such as www.renovatealerts.com who do the searching for you. Instead of checking what’s on the agent’s books subscribers receive an email containing properties that require renovating that are being advertised by estate agents all over the UK. In the last 30 days RenovateAlerts found nearly 17,000 properties – and that’s properties for sale, not sold or under offer.
Throughout the project, have a budget and equally important, stick to it. When buying any item, shop around, use the internet to find the best deals. Do not choose bespoke fittings; always remember that you are renovating to make money from it. You are not doing it to your own personal taste; you are doing it to sell in the future. It needs therefore to be simple and neutral. Of course, it may be more fun to decorate and fit the property out in your own taste – but beware, set limits.
To make the most of this your opportunity you need to have a mortgage in principle to show the seller that you are serious (or even better, be a cash buyer) and then offer a very low price. Once you have reached a deal, start planning your renovations so that you are ready to start as soon as you have the keys. Aim to turn the property around in a matter of weeks and rent it out (or live in it yourself). When banks start lending to each other again mortgages will be easier to get and buyers will want to snap up the cheap property. As soon as this happens prices will start to rise. Plus, by 2012 there is expected to be a shortage of property as builders have greatly reduced their building programs and demand will therefore outstrip supply. These factors could in fact lead to another property boom.
Then you can sit back and judge when to sell.
Disclaimer: All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986. The article is based on the writer’s personal view and you are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.
Real Estate Professionals
Recession? or Depression?
RECESSION? OR DEPRESSION?
What’s the difference between a recession and a depression? What’s a recession? How do we know if we’re in one? These are questions we all want answers to during these turbulent economic times. A glib definition is, when your neighbor loses his job it’s a recession. When you lose your job it’s a depression. The standard newspaper definition of a recession is a decline in the Gross Domestic Product GDP for two or more consecutive quarters. However, by using quarterly data this definition makes it difficult to pinpoint when a recession begins or ends. This means that a recession that lasts ten months or less may go undetected. The Business Cycle Dating Committee at the National Bureau of Economic Research NBER provides a better way to find out if there is a recession taking place. They define a recession as the time when business activity has reached its peak and starts to fall until the time when business activity bottoms out. By this definition, the average recession lasts about a year. What goes up must come down.
Periodic recessions are a natural part of any nation’s economic cycle. Most analysts pointed to fears surrounding the United States economy and a possible recession as the reason for the drop. Three days later, news outlets were already reporting a new economic stimulus package designed in part to try to prevent a recession. This isn’t the first recession news in recent memory. The old saying goes that economic forecasters were invented to make meteorologists look accurate. When the weather reporter predicts snow, one can look outside to see if the forecast is correct. But when an economist predicts a recession, the only verification is the opinion of other economists. Unlike snow, no one can be sure when a recession has begun, or when it has ended. Interest rates usually fall in recessionary times to stimulate the economy by offering cheap rates at which to borrow money.
Another indicator of a recession is a sudden rise-at least two percentage points-in the unemployment rate. Example: The general business recession caused high unemployment in the rust belt and low interest rates throughout the country. Whether a recession develops into a severe and prolonged depression depends on a number of factors.
A depression is a severe economic downturn that lasts several years. Fortunately, the U S economy has not experienced a true depression since the market collapse in 1929.
The Depression of the 1930’s was aggravated by poor monetary policy. The “New Deal” created many government programs to end the Depression, but government programs alone could not end it. We probably won’t see a depression like that again, simply because the government has learned how to avoid it. Many laws and government agencies were put in place because of The Great Depression with the express purpose of preventing that type of cataclysmic economic pain. It was the longest and most severe depression ever experienced by the industrialized Western world.
The Great Depression began in the United States but quickly turned into a world wide economic slump owing to the special and intimate relationships that had been forged between the United States and European economies after World War I. The Depression hit hardest those nations that were most deeply indebted to the United States, i e , Germany and Great Britain. The Great Depression had important consequences in the political sphere. In the United States, economic distress led to the election of the Democrat Franklin D. In Europe, the Great Depression strengthened extremist forces and lowered the prestige of liberal democracy. Prior to the Great Depression, governments traditionally took little or no action in times of business downturn, relying instead on impersonal market forces to achieve the necessary economic correction. After the Great Depression, government action, whether in the form of taxation, industrial regulation, public works, social insurance, social-welfare services, or deficit spending, came to assume a principal role in ensuring economic stability in most industrial nations with market economies.
Many factors can cause a recession to slip into a depression. Not the least being greedy CEO’s and inattentive members of congress. Probably the quickest, but least desirable, way out of a depression is war. WW2 is a perfect example. Economists cannot agree on the exact way to end a depression as no democracy has existed this long, so they have no road map to follow and are more or less feeling their way along.
There are two current theories under debate. 1) The unprecedented infusion of resources into the depressed economy will result in accelerated boom-and-bust cycles. This may result in the dissolution of our economic system as we know it. Or: 2) The unprecedented infusion of resources into the depressed economy will result in a long-term, painful recovery of our economic system. In either event, there does not seem to be a painless, “quick” fix that will make everyone happy and prosperous.
Repossession
How to Save Money on Your Home Renovation
Posted by admin in renovation on June 26th, 2010
Home Renovations continue to be a popular area of investment for homeowners despite the current economic turmoil. It makes sense at a time when buying new doesn’t and building on what you have, does. Now that you’ve decided to renovate, there are still some things to consider before you go ahead. Yes, you believe that you’re adding value to your property, however, with some wise planning before the hammer hits the nail you can actually be saving money too.
Create a Detailed Plan
It is of the utmost importance to properly create a plan, budget, and time frame for your home renovation job. Such preparation is crucial to the enterprising DIYer and it’s also useful to those counting on professionals. Get a very clear picture of all estimated costs that will account for everything from materials to labour. Not only that, but it’s also important to figure in backup funds for situations which may arise as the project progresses. A safe estimate is 15% on top of the initial projected budget. If you have a realistic figure to work with that corresponds with very detailed drawings and plans, you are preparing a contingency for those unforeseen issues. Just being aware of this possibility can keep you from future migraines and possible bankruptcy.
Cut Down on Material Costs – Not Quality
Materials of course account for a large portion of the expenses in any renovation project. And although you may want to get the best price you can, you may not wish to sacrifice quality just to save a few bucks. This is your home after all, (where you might be living for 20 years to pay off a mortgage).
Companies that sell recycled material from demolition sites such as Happy Harry’s give you both a budget conscious and green option. “Found” wood is another trendy yet wonderful option – imagine creating a unique hardwood floor from an old wood cabin or antique ship. If however, you are more inclined towards higher-end materials but want to pay a fraction of the cost, consider Habitat ReStores. These affiliate stores found across Canada and the United States offer surplus and used building materials for much less than retail. ReStores get their supplies from donated goods provided by: building supply stores, local contractors, demolition crews, and others wanting to support the cause. Not only are you saving money, or being green, you are also helping to raise funds that let Habitat for Humanity build 10 or more additional homes a year.
Implement Green into Your Renovation
It’s shocking to consider that your home may be a toxic place. Do you know what went into the finishes of your hardwood flooring or kitchen cabinetry where you cook, or even the paint on the walls in every room in the house? Making green choices for your home renovation is not only important for your health and the health of our planet, it can actually save you money. Although the initial costs may be higher, using ethical and non-toxic materials that are longer lasting, as well as installing energy efficient components will save you money over time. From more complicated aspects like redesigning your home, to being conscientious about product selection, consider these options suggested by Rob Wright, owner of Citadel Renovations.
* ICF foundations
* Composite floor, roof, and wall framing
* Low e film, argon gas, and triple pane glass in windows
* Compact fluorescent and LED lights
* Lots of natural light
* Reduced and/or no formaldehyde cabinetry
* Low or no VOC paints and finishes
* Composite material exterior finishes
* Recycled material roofing: metal, rubber, cement
* Wood or linoleum floors
* Heat pumps: ground, water, and air
The money you’ve saved on heating, lighting, and water once you’ve made your home more energy efficient will over time actually pay for those improvements.
Decide If It’s a Worthy Investment
It may seem like a no-brainer to first figure out if the investment you plan to make in upgrading your home is one of value, but it may come as a surprise that some are less financially beneficial than others. CMCH, the Canada Mortgage and Housing Corporation, Canada’s federal housing agency, is a great resource for homeowners who are considering a renovation project. Their website offers a host of useful information, such as this break-down of renovation payback ranges:
Top four greatest payback potentials
* Bathroom renovation (75 – 100%)
* Kitchen renovation (75 – 100%)
* Interior painting (50 – 100%)
* Exterior painting (50 – 100%)
Versus:
Ten average payback potentials
* Roof shingle replacement (50 – 80%)
* Furnace/heating system (50 – 80%)
* Basement renovation (50 – 75%)
* Recreation room addition (50 – 75%)
* Installing a fireplace (50 – 75%)
* Flooring (50 – 75%)
* Constructing a garage (50 – 75%)
* Window/door replacement (50 – 75%)
* Building a deck (50 – 75%)
* Central air conditioning (25 – 75%)
Repairs or beautification are the most prevalent ideas that come to mind, however, safety improvements are another way to go that will your wallet happy. Check with your insurance company if they offer lower premiums when you add or upgrade a home security system, fire prevention measure, or improve the existing wiring.
We’ve all heard the renovation horror stories that look like something out of that 80’s movie The Money Pit. It’s not something we like to think about; the possibility of your hard earned $10,000 renovation budget ending up being but a drop in the bucket. Like any other investment, you wouldn’t blindly drop ducats on any random man in a suit with a smile – you do your homework first. Not only will you bring added value to your home with your new renovation, you will also save money with your carefully laid out plans.
Repossession
A Plan for Home Renovation
Posted by admin in renovation on June 22nd, 2010
You have come to the decision that you want to renovate your home. Maybe you were planning to sell your home and move to a more updated house, but the slow housing market has put a damper on that idea. Or maybe you have been in your home for twenty years and think that a “facelift” is in order. Whatever the reason for your home renovation, you need to have a plan before you jump into the actual renovation process. The following tips can help you navigate your home renovation project. 1. Be prepared to supervise the renovation work. Even though you will probably have a contractor coordinating the various renovation activities, you will be the head project manager. You will need to know how to communicate and act professionally as well as solve problems that arise. Be honest with yourself and decide if you will be able to handle the inevitable stress that comes with home renovation. You can also ask someone else, such as a relative or trusted friend, to help you oversee your renovation project. 2. Plan how you will adjust to the renovation. Depending on how extensive your home renovation project is, you may need to live somewhere else while the work is being done. This is an option for those that want to renovate several areas of their home or the entire home in as little time as possible. If you plan to renovate one area at a time while you remain in the house, you will need to think ahead to how you will manage this. Make sure you know how you will prevent the dust and other debris from settling into your living areas. To avoid becoming overly frustrated, plan on each individual project taking longer than the estimated time. Kitchen renovations will have the most impact on your daily routines, so spend ample time determining your strategies for living with either no kitchen or a partial kitchen. 3. Decide which projects you want to do yourself and which ones you want to hire out. There are some renovation projects that you can easily do yourself or with the help of family and friends. Sometimes homeowners can be a little too enthusiastic and try to complete renovation projects that are too difficult for them. This is especially true for electrical and plumbing work. If you have any doubt that you can complete a project and be happy with the results, hire a professional to do the job. 4. Make sure you have the necessary permits for any renovation work you plan to do. The rules and regulations regarding building permits vary from state to state, so check for building laws that cover your area. If a contractor is handling the project, he or she will be responsible for obtaining any permits, but you may want to verify that all the paperwork is completed on time. If you are part of a homeowner’s association, make sure your home renovation does not violate any of the association’s rules.
Repossession
Relocate or Renovate?
Posted by admin in renovation on June 19th, 2010
Should I stay or should I go? Inevitably, most homeowners are forced to ask this question at some point in time. The decision to sell their house and move away or to stay in their home and remodel can be very tough indeed. Many factors certainly influence whether you decide to move or whether you stay and remodel your home.
Move or Remodel?
Location, location, location. It’s usually the mantra of real estate agents, but it applies here as well. Where your home is located is usually the most important factor because a home improvement project will never change the location of your house. You may be forced to undertake a move because of external forces you cannot change, such as:
You may not like the quality of your local school system.
You may not have many local options for shopping or lifestyle choices.
The size of your current lot or piece of land may not handle an increase in size or expansion.
A neighborhood association may prevent additions or expansions because it changes the look of the area or subdivision.
Legal or zoning restrictions in your city might prevent any changes.
Your subdivision may only have identical housing plans (”cookie-cutter houses”) and adding a second story or home addition could make it less valuable than the others in the neighborhood.
It may cost too much to renovate.
Because you cannot change these factors, you and your family may find that a move to a new location is absolutely necessary. Take a look at your home location and decide if it meets your needs, if it can be improved, whether or not it is too old, and whether or not you can deal with the stress of a remodeling project.
Too Much of a Good Thing?
Another factor in your “relocate or renovate” decision could be that your house is already the nicest in the area. An extensive renovation or improvement of the best house in the neighborhood might be fine if you’re planning on living there for an extremely long period of time. However, if you have plans of selling in the future, such a renovation might prevent you from getting a decent return on your investment. If your house is already the nicest, spending more on it won’t make the value go up even higher.
Taking the Plunge?
If you’ve decided to stay put, you may have made the best choice. If you ask people to list the costs involved with moving, most will only talk about the price for a moving company to come pick up their furniture. It can actually cost more to move than to take on certain remodeling work. There are costs associated with selling your house, buying a new house (realtor fees, closing costs), cleaning services, transporting your family (hotels, meals, gas), repairs and renovations needed to sell the old house, and many, many more.
If you’re going to renovate, keep these tips in mind to make sure your home improvement projects will go a lot smoother:
Decide whether you’re improving your home for you or for a future sale - If you want to remodel your bathroom or paint your interior walls, the choices you make can affect the value of your home. You might love the color red or a modern sink design in your master bath. However, home buyers are not always fond of exotic designs and it may do more harm than good when you’re ready to sell your home.
Decide whether you’ll move out during construction - You and your family may not be able to deal with the noise, debris, dust, and extra workers in your home. You might need to temporarily relocate to a hotel, apartment, or house. However, it might be a good idea to stay. Some like to be close to the action and be able to oversee the work being done. It’s also important for someone to be there to receive deliveries. If you stay, it’s important to make sure you ask workers clean up at the end of each and every day. Make arrangements to replace the room being worked on (for example, set up your kitchen appliances in a spare bedroom during a kitchen remodel.)
Arrange for sufficient financing to be able to cope during any project - There could be many hidden costs in a home improvement project, so it’s good to budget for surprises. Plan for problems that a contractor might discover during the renovation. Plan for extra time (which increases your budget), beyond your projected completion date. Plan for changes you might decide on, too - it might look good on paper, but you could change your mind during the remodeling job and those changes cost extra. Think about adding at least 15% to 25% to your expected budget… for emergencies. Consider the little things, as well - other hidden costs could include: ordering more takeout food during a kitchen remodel, paying for coin laundry services when your water is shut off for extended periods, or even hotel stays during heavy construction.
Plan to do it all-at-once or project-by-project - Many homeowners decide to remodel a kitchen and, while that job is underway, will then decide to add on a bathroom renovation. This can cause delays and extra expense. While it’s true that there are already construction workers on the job site, it takes careful planning to arrange for permits, materials, designs, and the subcontractors’ schedules to complete a project on time and on budget. It’s best to plan for your kitchen remodel, bathroom remodel, and new patio installation to happen all at once or you should plan for them to take place individually, over a period of time. It will cut down on cost overruns, delays, and headaches.
Make it Happen
As the real estate market continues to slow down, and in some areas drop dramatically, it is an important time to consider staying put and remodeling your home. Housing prices may continue to level out so one sure way to improve property value is a proper renovation. Consult a designer or architect in your area to determine which changes will be best for your home in your neighborhood (Find a local architect or designer-builder here.)
If you’re planning to stay in your current house for a long period of time, make sure that any renovations you do are truly for you. It’s your home and you’ve got to live in it and be comfortable. Whether you convert your basement into a recreation room or you want a spa tub installed in your master bathroom, go with the products and designs that work with your lifestyle. If your tastes are more exotic, you can always remodel or renovate again when you’re ready to sell.
If you plan and finance your renovation appropriately, you should be able to “make over” your home to suit your needs with little or no problems. ConstructionDeal.com is a great resource for finding the right expert to make your renovations dreams a reality. Don’t forget to bookmark our main page and we’ll be ready to help with your next project.
http://www.constructiondeal.com/pub/customer/article/RelocateRenovate.pub
Repossession
Renovating Commercial Property - What to Consider
Posted by admin in renovation on May 4th, 2010
Many people wonder what the best way of acquiring commercial property in Canada is, building or renovating. Renovating will still give one a commercial property to rent out or sell but one is not able to choose the desired location. If building, one will choose their location but it will take longer before the building is completed and ready for use. Building renovations are possible and one will have to consider a few things when renovating. Building contractors determine the type of work that will be done. Toronto home renovations can be used when doing home modifications. They will provide invaluable advice on the type of additions and renovations one can consider. These include basement remodeling and renovation and bathroom renovations and remodeling.
Toronto home renovators work with owners to come up with a customized building. They provide some of the best building renovations in Ontario, Mississauga and other parts of Canada because they believe in attention to details. One has to know what kind of renovations they want. Some could include handicap modifications and the company will build some ramps to ease wheelchair movements. If one wants to renovate a building that will house business offices, they should consider the customer base being targeted. At the same time, the building should be updated. This will add value to the building. Air -conditioning in hot regions is necessary. Plumbing to accommodate the extra people should also be put in. Modern buildings are taking advantage of minimizing costs. It is now common to find buildings utilizing solar power to cut down on electricity. Plants are being planted in pots and this directs attention to the plants instead of the façade of an old building. Toronto renovations take care of such details so people will hire space in the old buildings.
Office space renovations should include more sockets to accommodate the various electronics used in an office. The open plan has become fashionable in many offices and renovations should consider those. A Toronto renovator could also use double glazed windows. This will keep a room warm during winter. Elevators that can carry more people can be used when renovating and old ones removed. When buying property with intention of renovating, one should also remember that contractors delay projects. Even companies dealing in Toronto home renovations might be delayed for a number of reasons. This should not deter one from considering a these companies to fix their Toronto Kitchens or other rooms in the house. They provide some of the best Toronto home improvements. Once the homes are renovated, they can be sold handsomely.
In any type of construction, one requires building permits. In renovation, one has to approach the proper authorities who will inspect the building once it is complete to make sure their specifications have been met. Renovating a commercial property is a serious undertaking that requires proper planning. However, one should not shy away from it since it will reap profits. One gets a customized home with additions and renovations that raise the value of the property.
Repossession
Recession History
Since history seems to repeat itself, maybe we could learn something about the current possible recession by studying this country’s recession history.
I work with investments, so I’m particularly concerned with recessions because they can have a very negative impact on investment account values. I’m going to look at the recession history with particular focus on how each recession affected the Dow Industrials Stock Index. I have Dow Index data back to 1930, so we will start there.
I have known for some time that the market moves in approximately 15 year cycles. The market goes up for 15 years then seems to go sideways for the next 15 years. This growth and then consolidation pattern happens frequently through out history.
Let’s first consider the Dow Industrials index from 1930 through 1945.
This period started with the great depression. We all know the effect the depression had on stock values. The Dow lost over 88% of its value between 1929 and 1933. It made a nice rebound following the depression. It increased 345% over the next 4 years. We will see there is a theme in the recession / expansion cycle. Recessions are relatively short and can be very violent to investors in the stock market. The expansion period following recessions are much longer and historically quite good.
One thing you need to be extremely aware of. Numbers and percentages can be deceiving. I just mentioned that the index lost 88 percent, but then gained 345%. Sounds like you made up all your losses and then some. Not quite.
The dirty little secret to investment losses is this: if you lose 50% of your portfolio, you need to make 100% just to break even. This is an ugly little fact, but let’s look at it in real life. If you had $100,000 and lost 50%, you would be left with only $50,000. How much do you have to earn on your $50,000 to get back to even? You need to earn another $50,000. This is 100% of what you currently have. You lost 50% and must gain 100% just to break even.
Let’s put this into real life. In 1929 the Dow had a high of around 380 and in 1933 a low of about 48. This is an 88% decrease in value. Over the next 4 years it went from 48 to 187. This is a 345% increase. Sounds like you made up the 88% loss and then some. Unfortunately you have only gained back just over half of what you lost. This also is a recurring theme. When a recession takes huge bites out of portfolio values, it normally takes many years just to break even again. Not to get ahead of myself, but the Nasdaq has only regained about half of what it lost during the last recession. And this is 7 years later! The Dow and S&P 500 took about 6 years to finally break even. The kind of time periods required to recover definitely make the study of the recession history worth while.
Now that some of the back ground work is complete lets look at the next 15 years, from 1945 through 1960. In 1955 the Dow finally got back to where it was before the great depression. This was a very long 25 year wait. Imagine the poor retirees that retired before the depression and never again regained their original portfolio value!
Remember the last 15 years were mostly down then sideways (1930 through 1945). This next 15 year time period (1945 thru 1960) had very mild recessions with the worst only causing a 15% drop in the Dow. Overall, the Dow gained 267% over these 15 years. This is very good reward for a minimum amount of risk. This leads us to the next 15 years, 1960 to 1975.
The 15 year cycle is definitely in effect. The last 15 years were very tame yet had a nice return. These 15 years were not for the feint of heart. Gain was very little over the period, but volatility was killer. The period started out with a wonderful 75% gain, but gave it all back by the end. The recessionary periods were very violent. The reward available in this market was much smaller than the risk. It would have been nearly impossible to be a buy and hold investor and have stayed with the market.
Thus far, we had a 15 year period that was horrible (1930 thru 1945), one that was very nice (1945 thru 1960), then another horrible one (1960 thru 1975). Without looking ahead, we might guess that the next 15 year time period would be another nice one. The market consolidated over the last 15 years and should be ready to move ahead again.
This period began with a 6 years of continued consolidation (going sideways), but when it was done consolidating, it moved up very nicely. It moved from around 800 in ’82 to 2800 by 1990. This represents a 250% increase for the period. The volatility for the period was pretty tame, at least if you look at the volatility caused by recession. The largest pullback in value was the ’81 to ’82 recession which was about 18%. There was a large pullback in August of ’87 of about 30%, but wasn’t caused by recession and didn’t take that long to be regained; all in all a very fruitful 15 years.
This would lead me to believe that the next 15 years (1990 thru 2005) would be tumultuous again as the market needs to digest its gains.
The roll the market had going continued for the first half of this period. It gained 300% in just 8 years. This was more in the first half than the others gained in their entire 15 year period. This didn’t go un-noticed however, and the market promptly took back a healthy 35% through the next recessionary period. It took until mid way through 2006 to finally get back to even from the highs seen in ’99. Once this was achieved, however, the Dow just kept going. It extended its gains through the expansion period, hitting new highs once again.
This brings us to today. There is much talk about the beginning of another recession. We’re at the end of a period that should have shown consolidation, but instead had another large run up. This run up wasn’t without sizeable volatility. We’ve just broken a long term support line. I’ve drawn support lines through the years following recessions and had you sold when the support line was broken, you would have been saved a lot of grief during the next recession.
In summary, I would say that the recession history points to our next recession causing havoc on the Dow. When will the next recession be or are we already in it? I’ve covered this dilemma in another article. Personally, I think we are already in it. I believe the Dow just broke support and has a lot of potential to continue downward.
Repossession
More People are Relying on Credit Cards to Meet Mortgage and Rent Payments
Posted by admin in rent house on January 30th, 2010
A poll carried out by YouGov has shown that more than one million household in the UK have used a credit card to pay their mortgage or rent. Housing charity Shelter backed up these findings by revealing that 6 per cent of those surveyed admitted they need to use credit to meet their housing costs.
Younger people were found to be more likely to rely on credit to stay on the property ladder, with 7.5 per cent of those aged between 18 years old and 24 years old confessing they had used credit cards to meet their mortgage or rent repayments.
Those using credit to make such payments have been warned by the Housing Advice Service that they face getting themselves into a ‘spiralling maze of debt’ in which the credit available to them will eventually run out.
Housing charity Shelter have laid some of the blame at the door of irresponsible mortgage lenders, saying banks and building societies were allowing people to become financially stretched, forcing them to turn to credit to keep themselves afloat.
Chief executive of Shelter, Adam Sampson claimed the situation was appalling, he said, “The number of people hit by the credit crunch, interest rate hikes and unaffordable housing costs are rapidly rising. For many people trying to keep a roof over their head, desperation is driving them to short term, high cost borrowing. Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession.”
Shelter alleged that most credit card companies charged a rate of interest of between 15 per cent and 18 per cent, nearly 50 per cent more than even the highest mortgage rates of 11 to 12 per cent for people with poor credit histories.
People with poor credit ratings would typically be charged interest rates of up to 40 per cent by credit card companies, five times higher than the average mortgage rate.
Director of services at the Community Housing Advice Service, Stuart Freedman said, “There is such a pressure on people’s budgets that paying your mortgage or rent by credit card, then paying that card with another card is becoming the norm for many people. It leads to an ever spiralling maze of debt, and eventually the credit simply runs out.”
The findings from the research unearthed that men are fractionally more likely to use credit to meet their rent or mortgage repayments. On average, 7 per cent of men will use credit cards, compared to 6 per cent of women.
The places in the UK which are most reliant on credit are found in the Midlands and Wales, where almost one in ten households in these areas has resorted to using plastic to keep on top of rent and mortgage repayments.
As housing costs escalate further, Shelter have said it was becoming a ‘huge problem’ that was likely to become more widespread. They urged people who were struggling with their mortgage or rent to seek professional financial advice before thinking about whether to use their credit card.
Repossession
Sell your house faster with Sell House Faster
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How Sell House Faster can help
We can help with many situations including……..
• Repossessions
• Relocation
• Financial difficulties
• Broken Chains
• Divorce/Separation
• Emigration
• Bereavement
Whatever the reason for selling your property, our aim is to provide you with the best solution for your situation. We also offer a sell and rent back option, should you wish to remain in your home once it’s been sold. We can arrange a long or short term rent back package when you sell your property to Sell House Faster.
Selling a house through Sell House Faster is quick, simple and effective. You don’t have to worry about your house falling to pieces or if it’s in a bad neighbourhood, we will still guarantee to make you an offer on your house.
If you are interested in our services, please contact us so we can give you a free consultation and a no obligation quote.
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By N2H